SEC Proposes Rescission of Rule 14a-8 and Proxy Solicitation Reforms

The second proposal (the Proxy Solicitation Proposal) would streamline a number of procedural requirements with respect to proxy solicitation matters. Among other changes, the Proxy Solicitation Proposal would eliminate the requirement to deliver an annual report to security holders in connection with certain proxy solicitations, remove the 20-business-day proxy delivery requirement where information is incorporated by reference, eliminate the Notice of Exempt Solicitation filing requirement, and shorten the minimum broker search period from 20 business days to five business days.

The comment period for each proposal will remain open for 60 days following publication of the applicable proposing release in the Federal Register.

Background
Rule 14a-8 sets forth the process by which eligible shareholders may submit proposals for inclusion in a company’s proxy statement and form of proxy, subject to procedural eligibility requirements and substantive bases for exclusion. The rule allows shareholders to use the company’s proxy materials to seek a vote on qualifying proposals without bearing the cost of conducting a separate proxy solicitation.

The Rule 14a-8 Proposal notes that Rule 14a-8 has evolved beyond regulation of the proxy solicitation process into a federal regime governing the substantive circumstances in which shareholder proposals must be presented for a vote. The Rule 14a-8 Proposal states that shareholder voting rights and the conduct of shareholder meetings are principally matters of state corporate law and concludes that Section 14(a) of the Exchange Act does not authorize the SEC to establish a substantive federal standard governing those rights.

The Rule 14a-8 Proposal also identifies policy reasons for reconsidering the current framework, including the costs companies incur addressing shareholder proposals. The Rule 14a-8 Proposal cites SEC estimates placing the cost per proposal between $20,000 and $150,000, and references survey data indicating that a meaningful percentage of companies have spent more than $500,000 on proposal-related costs over a four-year period. The Rule 14a-8 Proposal also points to the concentration of proposal activity among a relatively small group of frequent proponents whose priorities may diverge from those of the broader shareholder base. Additional policy considerations include the increased availability and reduced cost of independent solicitations, technological developments that facilitate direct communication among shareholders, and uncertainty regarding the relationship between Rule 14a-8 and state law.

The proposal follows the August 14, 2026, announcement by the Division of Corporation Finance that it would discontinue responding to Rule 14a-8 no-action requests entirely—including requests under the “proper subject” exclusion in subsection (i)(1), the last remaining category to which staff had continued to respond following a November 2025 announcement that staff would no longer respond to requests under any other exclusion basis. The Division of Corporation Finance also stated that it would no longer issue letters indicating that it would not object to a company’s exclusion of a proposal. Companies remain subject to the existing Rule 14a-8 requirements while the rule remains in effect, including the requirement to notify the SEC when they intend to exclude a proposal.

Several of the procedural requirements addressed by the Proxy Solicitation Proposal were adopted to address the mechanics of paper-based proxy delivery and have not been substantially updated since the establishment of EDGAR and the widespread adoption of electronic communications. The Proxy Solicitation Proposal reflects the SEC’s view that these requirements have become unnecessary or duplicative in light of current technology and market practice.

The Rule 14a-8 Proposal

Rescission of Rule 14a-8
The Rule 14a-8 Proposal would rescind Rule 14a-8 in its entirety. As a result, the current federal framework—including the ownership and holding-period requirements for proponents, the one-proposal limitation, procedural requirements, resubmission thresholds, and the 13 substantive bases for exclusion—would no longer govern whether a shareholder proposal must be included in company proxy materials.

Instead, whether a shareholder may present a proposal at a meeting, and whether a company must include the proposal in its proxy materials, would depend primarily on applicable state law and the company’s charter, bylaws, or other governing documents. Rescission of Rule 14a-8 would not itself eliminate shareholders’ rights to present proposals where those rights exist under applicable law or governing documents, and shareholders could continue to conduct their own proxy solicitations. Because Rule 14a-8 currently prescribes a broadly applicable federal process even where state law is unclear, the practical treatment of proposals could vary among jurisdictions and companies if the rule is rescinded.

The Rule 14a-8 Proposal also takes the position that a company’s decision not to include a shareholder proposal in its proxy materials would not, in and of itself, give rise to liability for materially false or misleading statements. At the same time, the SEC notes that proxy statements commonly represent that management is not aware of other matters expected to come before the meeting, and that such a statement could raise anti-fraud concerns where the company has in fact received notice of a shareholder’s intent to present a proposal.

The Rule 14a-8 Proposal also includes conforming changes to proxy and information statement rules that currently reference Rule 14a-8. Among other matters, proxy statements would disclose any applicable deadline under state or foreign law or company governing documents for proposals sought to be included in company proxy materials, rather than a Rule 14a-8 deadline.

Expanded Discretionary Voting Authority Under Rule 14a-4
The Rule 14a-8 Proposal also would materially revise Rule 14a-4, which governs the authority conferred by a shareholder’s proxy card. Under current Rule 14a-4(c)(2), a company generally may exercise discretionary voting authority on a timely shareholder proposal that is not included in the company’s proxy materials only if specified conditions are satisfied. A proponent can prevent the company from exercising that discretionary authority by providing timely notice of the proposal and soliciting the percentage of shareholders required by the rule.

The Rule 14a-8 Proposal would replace that framework with a company disclosure and shareholder opt-out model. For a timely proposal that will be presented at the meeting but is not included on the company’s proxy card, a company generally could exercise discretionary voting authority if it: (1) provides a brief description of the proposal in its proxy statement and explains how it intends to exercise discretionary authority; (2) includes a cross-reference on the proxy card to that disclosure; and (3) includes a single check box on the proxy card allowing shareholders to prevent the company from exercising discretionary authority over all proposals omitted from the company’s proxy card. The proposed use of a single check box—rather than a separate box for each omitted proposal—is intended to simplify the proxy card, although a company could voluntarily provide multiple check boxes.

Under the proposed framework, a shareholder proponent could conduct a separate solicitation using a proxy card that includes the proponent’s proposal, while the company’s proxy card could omit the proposal. Unless a shareholder checks the new opt-out box on the company’s proxy card, the company could use proxies it receives to vote on the omitted proposal in the manner disclosed in its proxy statement. If the shareholder checks the box, the company could not exercise discretionary authority over the omitted proposal with respect to that shareholder’s shares.

The Rule 14a-8 Proposal is designed in part to address situations in which proponents use separate solicitations—including so-called zero-slate solicitations that do not nominate competing directors—to encourage companies to include shareholder proposals on company proxy cards. The Rule 14a-8 Proposal states that the revised framework would provide companies greater flexibility not to include such proposals while preserving a mechanism for shareholders to withhold discretionary authority.

Notably, the proposed changes to Rule 14a-4 would leave intact the universal proxy card framework as it applies to zero-slate campaigns—proxy contests in which the proponent does not put forward competing director nominees. In such campaigns, the proponent could continue to list the company’s own director nominees and management proposals on the proponent’s proxy card alongside its shareholder proposals. This may increase the likelihood that shareholders will use the proponent’s proxy card to vote their shares in lieu of the company’s proxy card, as the proponent’s proxy card would provide shareholders the ability to vote on both the company’s nominees and the proponent’s proposals. As a practical matter, companies confronting a zero-slate campaign involving proposals with meaningful shareholder support may still find it advisable to include those proposals on the company’s own card, or to solicit shareholders to submit a later-dated company card that would supersede any earlier-returned proponent card.

The Rule 14a-8 Proposal also would clarify that a company’s advance notice bylaw, or an applicable state or foreign law provision, generally would determine whether notice of a proposal is timely for purposes of Rule 14a-4(c). The existing federal default deadline—generally 45 days before the anniversary of the date on which the company first sent proxy materials for the prior annual meeting—would apply only where no applicable governing document or state or foreign law deadline exists.

Additional Amendments
The Rule 14a-8 Proposal includes a series of related amendments to conform the proxy rules to the rescission of Rule 14a-8 and the new discretionary voting framework. These include changes to Rule 14a-5 disclosure regarding shareholder proposal deadlines and amendments to the circumstances requiring a company to file preliminary proxy materials when there is a solicitation in opposition. The Rule 14a-8 Proposal also would remove Item 4 of Schedule 14C, which currently requires specified disclosure concerning certain shareholder proposals in information statements.

Registered investment companies and business development companies also would be affected. The Rule 14a-8 Proposal notes that the Investment Company Act independently requires shareholder votes on certain matters, including advisory contracts and specified fundamental policies. Rescission of Rule 14a-8 would not eliminate those statutory voting rights; rather, the mechanism for placing proposals before shareholders and soliciting votes would be determined by the applicable statutory provisions, state law, governing documents, and the remaining proxy rules.

Proxy Solicitation Proposal
The Proxy Solicitation Proposal would modernize several procedural requirements applicable to proxy solicitations. Unlike the Rule 14a-8 Proposal, these amendments are principally directed at eliminating requirements that the SEC believes have become unnecessary or unduly burdensome in light of EDGAR, electronic communications, and current proxy-processing technology.

Elimination of Annual Report Delivery Requirement
The Proxy Solicitation Proposal would amend Rule 14a-3 so that companies would no longer be required to deliver a separate annual report to security holders in connection with a proxy solicitation involving the election of directors. For companies that have already filed their Form 10-K for the most recently completed fiscal year, the filed Form 10-K generally would satisfy the relevant information requirement. A company that has not filed a Form 10-K could instead furnish an annual report that meets specified requirements on EDGAR before furnishing its proxy statement.

The Proxy Solicitation Proposal reflects the view that the current annual report delivery requirement has become largely duplicative because most of the information required in the Rule 14a-3 annual report is also contained in Form 10-K and is readily available through EDGAR and other electronic sources. Many companies today satisfy the requirement by furnishing the Form 10-K itself or a limited “10-K wrap,” rather than preparing a traditional glossy annual report.

The amendments would not prevent companies from continuing to prepare and distribute glossy annual reports or other annual shareholder communications voluntarily for investor relations or other purposes.

Elimination of 20 Business Day Delivery Requirement for Incorporated Information
The Proxy Solicitation Proposal also would eliminate the current requirement in Schedule 14A that a proxy statement be sent at least 20 business days before a shareholder meeting when specified information is incorporated by reference from another document. Similar timing requirements in Forms S-4 and F-4 would be eliminated. The Proxy Solicitation Proposal notes that the underlying documents are generally available electronically and states that a mandatory 20-business-day period is no longer necessary to ensure timely access.

Elimination of Notice of Exempt Solicitation
The Proxy Solicitation Proposal would rescind Rule 14a-6(g), which requires certain shareholders relying on the Rule 14a-2(b)(1) exemption from the proxy filing rules to submit a Notice of Exempt Solicitation on EDGAR when specified ownership and solicitation conditions are met. The Proxy Solicitation Proposal states that the notice requirement no longer meaningfully serves its original purpose because significant exempt solicitations are commonly publicized through press releases, websites, and other channels, and because many EDGAR notices have been submitted voluntarily by persons not subject to the rule. The underlying Rule 14a-2(b)(1) exemption permitting qualifying shareholder communications would remain; only the separate EDGAR filing requirement would be eliminated.

Shorter Broker Search Period
Rule 14a-13 currently requires a company to begin its broker search at least 20 business days before the record date for a shareholder meeting. The Proxy Solicitation Proposal would shorten that minimum period to five business days, citing the highly automated nature of modern broker searches and the delays that the current 20-business-day period can create in transactions, annual meetings, and proxy contests.

A shorter broker search period could meaningfully compress meeting and transaction timelines. The Proxy Solicitation Proposal acknowledges potential effects on shareholders who rely on advance visibility into record dates or need time to recall loaned shares in order to vote. The Proxy Solicitation Proposal requests comment on whether five business days is appropriate and whether the existing seven business day response periods for brokers and banks under Rules 14b-1 and 14b-2—which would exceed the proposed five-business-day minimum—also should be shortened. For example, if intermediaries were to respond within the maximum time currently permitted, companies would not receive responses before the record date when conducting a broker search using the proposed five-business-day minimum.

Other Proxy Modernization Amendments
The Proxy Solicitation Proposal also would require contact information on the cover page of proxy and information statements to facilitate communications with SEC staff and make a number of technical and conforming changes. The Proxy Solicitation Proposal would eliminate the stock performance graph requirement for all companies other than investment companies, which would instead disclose the graph in the investment company’s Form 10-K.

Practical Takeaways for Public Companies

Review advance notice and shareholder proposal provisions. Companies receiving shareholder proposals for the 2027 proxy season should continue to analyze them under the existing rule unless and until a final rule becomes effective. Companies should also review existing charter and bylaw provisions addressing proposals, meeting procedures, and advance notice provisions, as the prospect of a rescission of Rule 14a-8 may result in an increase in shareholder proposals for the 2027 proxy season. If Rule 14a-8 is rescinded, state law and company governing documents would assume substantially greater importance in determining whether and how shareholders may present proposals. While companies may wish to prepare proposed amendment language in advance so they are positioned to act quickly, they should avoid premature amendments before there is sufficient clarity as to the framework and boundaries of any final rule and applicable state law developments or requirements. Companies also should be cautious about voluntarily adopting provisions that replicate Rule 14a-8’s framework for shareholder proposal inclusion, given that the rule’s existing ownership and eligibility thresholds were not designed to account for the full costs and administrative burden of processing shareholder proposals, and that unresolved questions remain regarding how compliance with such provisions would be adjudicated.

Monitor state law developments. Within days of the SEC’s proposals, the Council of the Corporation Law Section of the Delaware State Bar Association issued a statement indicating that it will consider the potential rescission of Rule 14a-8 as part of its annual review of Delaware’s corporate statutes, and that the review could lead to proposed statutory amendments. Given the Council’s consensus-based process and the Delaware General Assembly’s typical legislative calendar, any resulting amendments to the Delaware General Corporation Law likely would not take effect before August 2027 at the earliest. Meanwhile, some states have already begun to address shareholder proposal mechanics. For example, Texas enacted Section 21.373 of the Texas Business Organizations Code in 2025, which permits qualifying Texas corporations to adopt bylaw or charter provisions imposing conditions on the submission of shareholder proposals. Companies should anticipate that states may diverge in their approaches, and that the choice of state of incorporation could take on heightened significance in the shareholder proposal context.

Reassess annual meeting and transaction timelines. The proposed elimination of the 20-business-day incorporation by reference period and shortening of the broker search period could provide meaningful additional timing flexibility. Companies planning mergers, other transactions requiring shareholder approval, or contested meetings should consider how the changes could affect record-date and mailing schedules if adopted.

Consider how a separate solicitation environment would operate in practice. Proponents of shareholder proposals may rely more heavily on state law rights, direct engagement, exempt communications, or separate proxy solicitations. Companies should consider how investor relations, governance, and proxy solicitation strategies would adapt if proposals increasingly were advanced outside company proxy materials.

Plan for reduced visibility into activist communications. If the Notice of Exempt Solicitation filing requirement under Rule 14a-6(g) is eliminated, companies may have reduced visibility into exempt shareholder communications. Companies should consider how to monitor third-party press releases, publications, or other channels to monitor shareholder campaigns that may affect upcoming votes.

Prepare for new proxy card mechanics. The proposed Rule 14a-4 check-box mechanism would require changes to company proxy cards, voting instruction forms, and potentially electronic voting platforms. Companies, proxy solicitors, transfer agents, and intermediaries should evaluate the operational implications, including how multiple proxy cards and potentially non-conflicting voting instructions would be reconciled.

Consider whether annual reports still serve a business purpose. Elimination of the Rule 14a-3 delivery requirement would not prevent companies from disseminating annual reports or other shareholder communications. Companies should evaluate whether those materials continue to provide investor-relations, branding, or communications value independent of the federal delivery requirement.

Conclusion
If adopted, the two proposals would substantially alter the federal proxy framework. The Rule 14a-8 Proposal would shift the shareholder proposal process from a uniform federal regime to one governed primarily by state corporate law, company governing documents, and independent shareholder solicitations, while the Proxy Solicitation Proposal would remove several procedural requirements the SEC views as outdated. Litigation challenges could delay the effective date of any final rules. Companies should continue to comply with existing requirements while planning for potential rule changes and closely following the comment process, emerging state legislative responses, and any related litigation.

For answers to frequently asked questions about these proposals, please visit this related FAQ.